Full year of FTC/DOJ progressive antitrust enforcement

January 19, 2023
Posted in News
January 19, 2023 admin

January 19, 2023

W. Todd Miller, Amber McDonald, Erin Glavich, Lucy Clippinger


2022 was the first full year in which the progressives were responsible for the operations of both federal antitrust enforcement agencies. It was an extremely busy year, including numerous litigated merger challenges, criminal section 2 monopolization cases and sweeping policy announcements. While the jury is still out on whether any of the initiatives will have a lasting impact, early indications have generally not been favorable. Major resource-intensive litigations have been lost, policies have been announced but left unimplemented, and a shift by the courts to accommodate progressive thinking and analysis appears unlikely. However, this is not to say that the year was completely devoid of progressive victories – there have been a few litigation wins, some major settlements, and several matters that were initiated in 2022 are moving forward and may bear fruit in the not-too-distant future.

This article, while not exhaustive, gives a broad summary on the past year and indicates what might be expected in 2023.


One of the biggest areas of newsworthy comments relates to the government’s merger review program:

The government promised revised merger guidelines, which have yet to be published (for further details, see “FTC and DOJ announce plans for merger guidelines overhaul and seek public input“).

The government failed to reinstate early terminations under the Hart-Scott-Rodino Antitrust Improvements Act, even though the number of filings (the justification for its suspension) has dropped materially.

Both the FTC and the Department of Justice (DOJ) have lost high-profile merger litigations (for further details, see “Four weddings and a funeral: government loses four merger cases but wins one“).

In better news for the government, the FTC has been successful in two large vertical cases in which the parties abandoned the transactions after the FTC initiated litigation. Further, the DOJ won the book publishers case, which focused on labor side effects. In the final days of 2022, Congress passed legislation to modernize filing fees associated with the Hart-Scott-Rodino premerger notification program, which, when in effect, will result in significantly larger fees for the largest transactions and more fee-based revenue for agency enforcement (for further details, see “Changes to fee structure for Hart-Scott-Rodino Act filings“).

Putting aside the ongoing challenges (eg, Microsoft’s proposed acquisition of Activision and Meta’s proposed acquisition of Within), the appeal of the DOJ’s loss in the United Health case will be in the forefront of agency officials’ minds in 2023. There, the court held that the appropriate standard for reviewing a transaction where the parties have a resolution in hand (known as “litigating the fix”) is to see whether the transaction as subject to the resolution would meet section 7’s standard of “substantially lessening competition”. The government agency challenging the transaction would bear this burden. The agencies believe that the appropriate standard is for the merging parties to bear the burden of showing that the resolution would “replace the competition that would be lost” as a result of the unreformed proposed transaction. This battle over the standard for the review of a proffered resolution to a transaction’s competitive concerns is already playing out in the DOJ’s challenge to ASSA ABLOY’s proposed acquisition of Spectrum Brand Holdings’ Hardware and Home Improvement division, where pre-trial proceedings have drawn amicus briefs on the standard.

Labor market restraints

2022 was also significant for the focus of government agencies on the impact of mergers on labor markets. The Biden administration has reiterated its commitment to employing antitrust tools to increase wages and employment opportunities (for further details, see “FTC engagement in labor markets: all talk or real action?“).

In one noteworthy example, the DOJ fought to successfully block the acquisition of publisher Simon & Schuster by its largest competitor, Penguin Random House (PRH). The DOJ sued to stop the merger, arguing that that the deal would grant the world’s largest book publisher “unprecedented control” over the industry and result in “lower advances for authors”. The district court’s rejection of PRH’s proposed “fix” to have PRH compete “internally” with Simon & Schuster marked a much-needed victory for the Biden administration.

The antitrust agencies were decidedly less successful in their criminal undertakings. For example, the DOJ brought a pair of criminal cases related to wage fixing and employee allocation. Both United States v Jindal and United States v DaVita Inc resulted in jury acquittals, despite key rulings in favor of the DOJ (for further details, see “Department of Justice set back by acquittals in labor antitrust cases“).

2022 was also the year that the government planted seeds for potential future labor successes. For example, the FTC and the DOJ filed a brief as amici curiae in a Seventh Circuit appeal involving McDonald’s restaurants franchise contracts with “no poach” provisions in agreements, which prohibited McDonald’s franchisees from soliciting or employing employees for a specified period following the worker’s separation from another McDonald’s restaurant. In their brief, the agencies argued that the district court, which had found that a rule of reason analysis was appropriate in the case, had “misapplied the law”. Rather, according to the agencies, a proper analysis would have begun with the premise that horizontal agreements of the type enforced by McDonald’s are in themselves unlawful (ie, per se illegal) unless the defendants can establish an ancillary-restraints defense. The matter, which remains under consideration by the Seventh Circuit, will have important implications for defining what constitutes pro-competitive franchise-related contractual restraints.

Although technically occurring in 2023, the FTC has also announced a proposed rulemaking with the potential to significantly impact labor markets: a near-complete ban on non-compete agreements.

Section 2

In Spring 2022, the DOJ announced a dramatic shift from its 40-plus years’ practice of not criminally prosecuting monopolization cases brought under section 2 of the Sherman Act. It was initially unclear whether this announcement was merely intended to put potential defendants on notice of additional leverage against them, or whether the DOJ planned to follow through and look for opportunities to bring criminal section 2 charges. That question was answered in October 2022, when the DOJ announced that an executive at a paving company had pled guilty to criminal attempted monopolization. In December 2022, the DOJ announced criminal charges against players in the transmigrant industry brought under both sections 1 and 2 of the Sherman Act.

The transmigrant industry indictments are worth watching. The general thinking among many people was that criminal prosecution of section 2 violations was unnecessary because section 1 captured the most egregious behavior and other criminal statutes (eg, the wire fraud statute) could be used to pursue conduct that had not resulted in an actionable conspiracy. Moreover, statutes criminalizing conduct generally must be clearer and more predictable than those creating civil liability (see the rule of lenity). While section 1’s statutory language is just as sparse as section 2’s, there has developed a strong body of case law defining the scope of criminal liability. Indeed, in the DOJ’s criminal prosecution of various labor restraints – which the DOJ lost (for further details, see “Department of Justice set back by acquittals in labor antitrust cases“) – the DOJ did withstand the defendants’ challenge to the basis for the prosecution in the first instance. In contrast, with so few section 2 criminal cases, and general uncertainty over market definition and other aspects of section 2 enforcement, there will likely be room for forceful challenges to the DOJ’s prosecutions.

The government’s section 2 civil litigation has been less dramatic and has largely been a continuation of previously instigated cases. The start of 2022 brought a section 2 victory for the FTC, as a district judge found that the FTC had established that Martin Shkreli (also known as “Pharma Bro”) had violated sections 1 and 2 of the Sherman Act in the pyrimethamine market. The court entered an injunction banning Shkreli from participating in the pharmaceutical industry for the rest of his life. However, the first half of 2022 also brought the FTC a section 2 disappointment in the pharmaceutical industry, as its suit against Endo Pharmaceuticals, Impax Laboratories and Amneal Pharmaceuticals (Impax’s parent), which included a section 2 claim against Amneal, was dismissed for failure to state a claim. The FTC’s appeal of that order has been complicated by Endo’s subsequent filing for bankruptcy.

Section 2 cases that continued to be litigated by the FTC through 2022 include the FTC’s suit against Facebook (for further details, see “FTC v Facebook – where are they now?“), as well as its suit against Surescripts, which has been pending since 2019. The FTC and Surescripts finished briefing summary judgment motions in August 2022 and await a decision on those motions from the district judge. The DOJ and state attorneys general’s suits relating to Google’s alleged maintenance of monopolies in the search and search advertising markets is now at the summary judgment stage, and additional section 2 suits against Google, brought by state enforcers and without federal support, are pending elsewhere. One challenges Google’s alleged monopolization of display advertising markets, while another suit focuses on Google’s alleged monopolization of the market for the distribution of Android applications. It remains to be seen whether any of these cases will proceed to trial.


2022 saw the FTC issue a number of policy initiatives and actions targeted at specific industries and practices. These targeted actions reflect both the progressive and broad approach of the Biden administration, focusing on areas such as labor, access to healthcare and drug pricing, as well as emergent issues stemming from the covid-19 pandemic, including supply chain problems and the infant formula shortages. The FTC’s actions in 2022 culminated in the issuance of a new section 5 policy statement, announcing a broad interpretation of the FTC’s authority to prevent “unfair methods of competition”.

Much of the FTC’s 2022 agenda touched on healthcare. As part of merger guideline revisions, the FTC and the DOJ sought public comment through four listening sessions (for further details, see “DOJ and FTC gather real-life stories of impact of consolidation“), one of which was dedicated entirely to the impact of consolidation in healthcare. The FTC also sought public comment on the impact of pharmacy benefit managers (PBMs), entities that decide which drugs are covered by insurance carriers. In June 2022, the FTC launched an inquiry into prescription drug middlemen (with a heavy focus on drug companies and PBMs). A week later, it held a two-day public forum to re-examine antitrust enforcement in the pharmaceutical industry, and the following day, it announced ramped up enforcement against illegal bribes and rebate schemes that block patient access to generic and lower-cost drugs (for further details, see “More democrats, more action? FTC increases scrutiny of pharmaceutical rebate walls and fees“). Additionally, the FTC had an active and successful docket of traditional challenges to horizontal healthcare mergers, resulting in the abandonment of the three healthcare mergers, as well as securing divestitures of specific medical treatments as conditions of healthcare mergers (for further details, see “FTC intensifies healthcare activism“). But the FTC faltered and lost its challenge to the Illumina/Grail vertical merger (for further details, see “Expect more of the same: FTC’s novel challenge to Illumina’s acquisition of Grail” and “Novel challenge to Illumina-Grail merger has unhappy ending for FTC (for now)“).

The same policy goals translate across industries. The FTC has been pushing into the agricultural sector, an area it was forced to partially abandon beginning in 1980 when Congress found that the FTC had gone too far in pursuing agricultural cooperatives.

On 1 September 2022, FTC Chair Lina Khan submitted her own comment to the US Department of Agriculture (USDA) on its proposed rulemaking relating to poultry growing tournament systems. She asserted that “[t]he FTC has a special interest in rulemaking under the Packers and Stockyards Act” because it was allegedly modelled in part on the FTC Act and both those acts seek to promote fair competition. The comment is noteworthy not only because it was not an official FTC statement, but also because it had been generally thought that interaction with the agriculture industry within the Executive Branch was largely within the purview of the DOJ (the Antitrust Division of the DOJ has a Transportation, Energy, and Agriculture Section, and the DOJ and USDA announced early in 2022 that they would cooperate closely on the enforcement of the Packers and Stockyard Act and initiated such things as a confidential hotline to take complaints from farmers). Chair Khan has stated that the FTC is employing a “whole of government” approach and has increased collaboration with other federal agencies. More recently, the FTC applied its PBM rebate scheme enforcement policy in the agricultural sector by filing (along with 10 state attorneys general) complaints against two pesticide manufacturers, alleging illegal “loyalty programs” under which the distributors were paid to keep business with competitors below low thresholds.

Furthering its scrutiny of pricing practices, it has been widely reported that the FTC is currently investigating the Coca-Cola and Pepsi corporations for illegal price discrimination under the Robinson-Patman Act. Often maligned for its potential to increase pricing to consumers, and completely ignored by federal government enforcers for the past 40 years, the Robinson-Patman Act has the potential to be a strong tool in a progressive enforcer’s arsenal with its desire to preserve competition from small grocers and retailers (for further details please see “Progressive antitrust agenda on pricing: silence before the storm?“).

Perhaps the most sweeping FTC policy change came late in 2022 when the FTC issued a new statement on the FTC’s interpretation of and enforcement under section 5 of the FTC Act. Section 5 empowers the FTC to prevent and stop “unfair methods of competition”, reaching conduct not captured by other antitrust laws. The new policy rejects the prior framework founded on the so-called “rule of reason” and consumer welfare standard. Instead, the policy dramatically expands the FTC’s enforcement purview by permitting the FTC to pursue any conduct that it believes is an “unfair method of competition” as a violation of section 5.

Unfairness is judged on a sliding scale of two key criteria: the degree of misconduct and the tendency to negatively impact competitive conditions. The FTC asserts that there is no requirement to show actual competitive harm: the more facially unfair the conduct, the less need to show impact on competitive conditions.

The FTC implemented this new policy with the early 2023 announcement of consent decrees forcing three companies to abandon non-compete clauses in their employment agreements based on the clauses being an “unfair method of competition”. Shortly thereafter, the FTC initiated a rulemaking process to adopt an almost total ban on non-compete agreements between employers and workers. These actions portend an environment where the FTC will likely continue to push the boundaries of section 5 in its litigation agenda and perhaps initiate other sweeping rulemakings. All of this is taking place against the backdrop of challenges to the constitutionality of the FTC’s structure (for further details, see “FTC under attack as parties challenge its structure and participation of chairperson“). The US Supreme Court, which seems likely to place a strong check on the power of federal regulatory agencies in general, is expected to issue a decision in one case challenging the FTC’s structure in the first half of 2023 (for further details, see “Axon Enterprise, Inc v Federal Trade Commission: where are they now?“).


Meanwhile, 2022 does not appear to have been a year of particular innovation at the DOJ apart from the decision to pursue criminal section 2 cases and the recently announced pursuit of interlocking directorates under section 8 of the Clayton Act (for further details, see “Interlocking directorates: why do we care?“). The year was filled with a number of cartel matters, many involving attempts to defraud the government or matters involving local commerce, and the merger matters previously discussed.


Given the FTC’s attempts to innovate in the antitrust enforcement space, with the sole republican commissioner seemingly increasing her dissents, the FTC will remain an important place to watch. The recent change in control of the US House of Representatives may make things even more interesting: while there are areas of bipartisan agreement regarding a need to increase enforcement, particularly against big tech, the FTC’s efforts to expand its powers might draw a reaction from the House – the source of budget decisions. Indeed, one of the first actions that the republican-led House did was to reverse the increased budget given to the Internal Revenue Service. An expanding FTC might face a similar fate should its efforts rankle enough House members (or their important constituents).

This content was originally published on January 19, 2023, via the International Law Office (ILO) newsletter. It can be found here: Full year of FTC/DOJ progressive antitrust enforcement

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